Supreme Court Hears Arguments on Rural Broadband Subsidy

A conservative advocacy group, Consumer Research, is seeking to dismantle the long-standing practice of requiring U.S. telecommunications companies to contribute to the expansion of broadband access in remote areas of the country. The Supreme Court has heard the group’s arguments, and despite its own conservative leanings, appears poised to uphold the subsidy, which focuses on rural areas.

Background of the Universal Service Fund

For over three decades, the Federal Communications Commission (FCC) has collected funds from U.S. telecoms as part of the Universal Service Fund, established by Congress through the Telecommunications Act of 1996. The FCC administers the fund, levying fees on telecoms, which are then passed on to consumers.

Challenges to the Practice

Consumer Research has argued that the practice is unconstitutional and has taken its case to the Supreme Court. However, judges from both sides of the political spectrum expressed skepticism about the group’s arguments during the hearing. Trent McCotter, one of the group’s lawyers, argued that the program lacks a set cap, stating, “There is no clear boundary for the FCC’s ability to set the amount to be raised.”

Justices’ Reactions

Conservative justices Brett Kavanaugh and Amy Coney Barrett questioned the validity of McCotter’s argument. “Your position would say, I think, that a solution to the problem you identify could be a trillion dollar cap or a $100 billion cap. And that makes the position seem…what exactly are you trying to accomplish?” Kavanaugh asked. Barrett added, “That just seems a little bit hollow. Kind of seems like a meaningless exercise.”

Fee or Tax: Implications and Consequences

The justices also debated whether the FCC’s practice constitutes a fee or a tax, and the potential implications of this distinction. Judge Neil Gorsuch noted, “This is just a straight-up tax without any numerical limit, any cap, any rate. And we’ve never had something like that before.” The majority of the judges expressed concerns about the potential consequences of ending the program, which currently generates around $8 billion annually for the FCC to improve internet access in rural hospitals, schools, and libraries.

Conclusion and Next Steps

Justice Ketanji Brown Jackson asked, “You don’t see the risk that we judges would be overriding popular—and I know you don’t care that it’s popular, but popular in the sense that Congress has enacted it—programs?” The arguments for this case have concluded, and the judges are expected to issue a ruling in June.